Saudi Arabia concluded a memorandum of understanding with the International Monetary Fund (IMF) to establish a regional office in Riyadh, which would boost its presence in the region and provide its economic recommendations to the countries of the Gulf and the region.
Saudi Minister of Finance Mohammed al-Jadaan signed the MoU with IMF Managing Director Kristalina Georgieva in Riyadh. A number of Gulf finance ministers and officials were present at the event.
Jadaan said Gulf countries had significantly benefited from support for capacity development, and necessary reforms are currently being implemented in light of the challenging global environment.
He reiterated Saudi Arabia's keenness, along with the Gulf countries, to address food insecurity and work together to eliminate the crisis, adding that establishing a regional office in Riyadh strengthens relations.
"We are taking our cooperation to a new level by establishing an IMF regional office in Riyadh. It will spearhead engagement with regional institutions, strengthen relationships with country authorities, and help expand the IMF's capacity development activities—which will make it one of the largest contributors globally," Georgieva said.
Food security
Georgieva said her meeting with Saudi ministers tackled global issues and was instrumental in further deepening the cooperation between the IMF and Saudi Arabia, as well as other Gulf states, especially in responding to the global series of shocks, including food insecurity.
She expected that the GCC countries would achieve a growth rate of 6.5 percent, compared to 2.6 percent last year, and the momentum of economic growth in the Gulf region would continue.
She added that the recent meeting with the Gulf ministers focused on the importance of achieving sustainability, diversifying sources of income, and weighing the aid needs of other countries.
The official believes that the MoU with Saudi Arabia will further increase opportunities for cooperation, investing, and supporting the region given the Fund's experience, setting policies to reduce economic restrictions, and providing Arabic training for employees and individuals in government entities.
Georgieva stressed that Saudi Arabia will become one of the fastest growing economies in the world, noting that maintaining the reform momentum to diversify the economy further will be pivotal for longer-term prosperity.
She said she was grateful for the Arab Coordination Group's recent announcement to provide an initial $10 billion to alleviate the global food supply crisis and is extremely pleased that several GCC countries are planning to make further pledges soon.
Economic integration
Meanwhile, the Financial and Economic Cooperation Committee of the Gulf Cooperation Council (GCC) held its 117th meeting on Monday in Riyadh.
The meeting was chaired by the Saudi Finance Minister, chairman of the current session, with the participation of the GCC finance ministers, GCC Secretary-General Nayef al-Hajraf, and several senior officials and specialists.
Jadaan stressed that GCC leaders are keen to reach the highest levels of economic integration, stressing the importance of implementing the requirements of the Gulf common market, for the benefit of the citizen.
He warned that the economies of the GCC countries were not immune from the effects of the economic crises the world is going through.
GCC countries, however, were keen to confront these crises proactively, he remarked, noting that their quick action to address their repercussions helped contain their impact within a short period.
High growth rates
He added: "As a result, the GCC countries continued to maintain development and achieve high economic growth rates, despite the IMF's lowering of its expectations for the performance of the global economy during the current and next two years."
This gives promising opportunities to bolster economic integration and continue efforts to achieve the goal of attaining Gulf economic unity, he explained.
The world's challenges and difficulties are still present and ongoing, cautioned Jadaan, adding that this requires everyone to intensify efforts and cooperation to preserve the gains and overcome the challenges.
Market turmoil
Following the end of the committee meeting, the joint session of the finance ministers and central bank governors of the GCC countries was held with the IMF Managing Director.
Jadaan remarked that the global economy was severely affected by the COVID-19 pandemic and recovered strongly in 2021.
However, he said it is now facing significant headwinds while the pandemic impact remains, supply bottlenecks persist, and energy and food markets are in turmoil, with inflation rising to its highest levels in several years.
The meeting addressed several financial and monetary issues and discussed the IMF's paper, "Economic Prospects and Policy Challenges for the GCC Countries," which focused on policies necessary for GCC countries to alleviate the repercussions of the pandemic and oil prices.
They also tackled the significance of focusing on policies to ensure financial sustainability, such as non-oil revenues, increasing investments in renewable energy resources, and the importance of structural reforms to boost private sector-led growth and provide job opportunities.
